MR. BARTLETT: I don't know if we usually do a transcript of this,
or not, but -- we do. This will be on the record, embargoed until the
speech is delivered, because I'll be talking about specific elements of
the speech to give you an opportunity to actually get ahead of the game
as far as studying up and doing some homework so you can write eloquent,
smart, interesting, accurate stories.

I'll start by just kind of -- make some broad observations about
the speech, and then we can talk a little bit about specifics in the
speech. I think the best way to describe this from a broad sense is
that there's been a lot of reporting and speculation about this being
more of a visionary speech, a philosophical speech, a directional
speech, and I think those are all accurate descriptions. But to give it
a little more specificity, there have been interesting developments,
obviously, in the last few years with the conduct of the war, of the
challenges we face overseas, also with a dynamic economy not only here
in our country, but also vis-a-vis competition in the world, and it's
this type of fast-paced change and difficult moments in the war that
has, in some instances, left the American people with certain fears and
anxieties, which is, I think -- can be described as natural when you
look at the brutality of the enemy, when you see the types of tactics,
brutal tactics being used on the battlefield, whether it be in Iraq or
in Afghanistan or elsewhere -- when we see the likes of a bin Laden or a
Zawahiri -- that it is a stark reminder that we're a country that still
is under threat, that we are a nation at war.

It's also unsettling for the American people to grapple with the
rising cost of energy, the rising cost of health care. The dynamic
aspect of our economy where jobs are constantly being created and lost
-- announcements from GM -- the rising competition of global players on
the economic scene, such as China and India, all give a level of angst.
And really what it comes down to is a question of what does America do
about it? What is our position in the world? What is our position here
at home? And the President has firmly rooted our cause both at home and
abroad in aggressive American leadership in the world and here at home,
in order to help protect the American people, and extend and expand our
economic prosperity.

But there's been an interesting debate, and the debate has happened
in our country at times before. There have been isolationist tendencies
and there's been protectionist tendencies. That was acutely aware, if
you think about it, on the economic scene this past summer with the
debate about CAFTA. Here was an issue in which there was every reason
for both to have a large margin of victory in the United States Congress
because of not only the economic benefits to our country for CAFTA, but
also the strategic foreign policy benefits of this. Yet, it only passed
by one vote.

What I'm saying is, is that there are some currents that go on in
our country from time to time, whether it be the tendencies of
protectionism or isolationism, this debate whether we are stirring up
problems overseas, if we were just to retract from the battlefield, if
we weren't always provoking them, we would be safer. And that's a
fundamental debate that's happening in our country. And the President
has been talking about this, at least privately, with not only members
of his staff, but other world leaders. And the question is whether --
he decided that he wanted to use this State of the Union as an
opportunity to discuss this, and in a very extensive way. So in some
respects, this State of the Union will be a bit different than past
State of the Unions because it will discuss this kind of philosophical,
directional debate underway.

Sometimes it's the underlying debate; it's not sometimes the
explicit debate that's being had of isolationism or protectionism. But
what the President will do is going to directly discuss this issue,
confront it and make the case in the strongest terms possible as to why
it's in the United States' interest to be actively engaged in the world,
to continue to fight this war on offense, but not only in the context of
the war, that we can't retreat from within our borders when it comes to
other duties and responsibilities we have, like fighting HIV/AIDS on the
continent of Africa, or malaria -- that we have a duty and
responsibility and it's in our country's own interest to do so.

We also have a duty and a responsibility on the economic stage of
America -- of the world to continue to maintain America's economic
preeminence. And the only way to do that is to be robust in our agenda
and -- as well as in our directional purpose, to maintain America's
economic leadership in the world.

So he's going to talk specifically about these issues, about the
war on terror. He'll begin the speech -- the speech is basically broke
down into three major sections. The first section, talking about
foreign policy, talking about the war on terror, talking about our
country's history of advancing freedom and democracy. Some of it will
sound familiar to you who follow him all the time. I promise there will
be no Koizumi reference in the speech. (Laughter.) But beside that, it
will sound very familiar in that respect, because it is a central aspect
of America's foreign policy for good reason.

Q Why is he snubbing the Japanese? (Laughter.)

MR. BARTLETT: We're making all the bilateral contacts right now,
to make sure to assuage them from any misinterpretation of an omission.
(Laughter.) No. But like I said, it will be a robust defense of, and
articulation of why our foreign policy and the security of the American
people relies upon our government taking a very aggressive stand against
the terrorists, but also a very principled stand for freedom and
democracy.

And he will talk specifically. He will repeat what he said in the
inauguration last year, of ending tyranny in the world. This is a very
noble goal. Some have said it to be too idealistic. He will
specifically address that issue as to why it's practical and it's in our
interests.

He will talk about developments on the democracy agenda, talking
specifically about the Middle East, talking about the situation with the
election of -- in which Hamas had done so well recently in the
Palestinian Territories. He will talk about -- at length, obviously,
about developments in Iraq, our strategy in Iraq and what we're doing to
prevail in Iraq. He will also mention other issues on the democracy
agenda, including Egypt and Saudi Arabia. Those are all very important
aspects of the democracy agenda, and he will speak to them.

One point he will make very clear is that elections are not the end
of the experiment of democracy, and in many respects it's the beginning.
It's the real institution building that has to go hand-in-hand with
elections that is critical to build the types of enduring institutions
to ensure that the election is not just that, the end all, be all; it is
the beginning. And he's going to be very clear about that.

As I said, he will talk specifically about not only what's going on
in Iraq specifically, in the broader Middle East and other foreign
policy matters, as I just said. If America were to look inward and
withdraw from the world, it has serious consequences for millions upon
millions of people throughout the world who turn to the United States of
America for moral and direct assistance, like I said, on AIDS and HIV --
HIV/AIDS, as well as malaria and other issues. So the President will
call on Congress to continue to meet our commitments when it comes to
helping those who need -- who are in the most desperate need of help.

He will also, on the foreign policy side, talk about the aggressive
steps, the necessary steps we're taking here at home to protect our
country. There's a debate that is front and center, both on the Patriot
Act and other aspects of what we're doing to protect the American
people, and he will be very explicit, as you've heard recently, about
the necessity for the actions we are taking, including the terrorist
surveillance program, and the reauthorization of the Patriot Act. So
that will be a key aspect.

One thing -- I do want to digress for a second to talk about an
overall theme before I get into more specifics, and that is -- and
you've heard the President, he mentioned it yesterday in the Cabinet
meeting, he's mentioned it in some recent interviews -- and that is,
part of, I think, the dissatisfaction with what's going on in
Washington, D.C. is coupled with the fact that the divisive tone, the
partisan atmosphere that is taking root here, and some have -- observers
have said it's the worst it's ever been, or it's the worst it's been in
recent memory -- and the President has been very forthright in saying
it's probably one of his biggest disappointments since he's been
President. Those who have chronicled his political history, he has been
somebody who has had success in the past, both in Texas and in the early
days of his administration here, of bringing Republicans and Democrats
together.

Tonight, I think on more than one occasion, you will see the
President calling on the Congress to come together, that he will do his
part to elevate the tone in Washington, that he understands he plays a
role in this. He's not going to be just pointing fingers at them to do
it, he will say, collectively. I think there will be specific
initiatives that the President will outline that clearly transcend the
traditional partisan politics and can be the type of issues that can
bring Republicans and Democrats together, particularly on the war. As
the President has made clear, both in recent speeches in December, as
well as meetings he's been conducting with both Democrats and
Republicans on the Foreign Relations Committee, former Secretaries of
Defense and State, that whatever our differences in the past may have
been on Iraq, everybody can recognize the importance of winning now. He
will reiterate that call. The fact of the matter is, is that the type
of struggle we are in against a determined enemy will require both
Republicans and Democrats in Congress to work together to ensure the
security of our country.

He will also talk about -- as I said, there will be some domestic
initiatives. And, really, I believe, as a turn to the domestic side,
one of the cornerstones of this speech will be a new American
competitive initiative that the President will outline tonight. As I
discussed, America's preeminence in the world economy is unquestioned,
but that does not mean we should become complacent. And there has been
a lot of interesting research and commentary in recent -- in the past
year. The National Academy of Sciences, others, have looked at
America's competitiveness and had kind of put some of the warning
signals on the dashboard of the future of our economy when it comes to
ensuring that we continue to be the leading innovator in the world.

It's really what has made us, our economy the envy of the world, is
because we are still the best place in the world to do business. The
best, brightest minds in the world come to America. We have the most
universities. We have -- the cutting-edge research that is being done
is being done in America. It's because we have a climate, an
environment and a workforce to do it better than anybody else in the
world.

But that's not going to stay the same if we do not take aggressive
steps to maintain our economic leadership in the world. The President
will acknowledge the fact that rising economic competitors, like China
and India, is something that we have to recognize and address. The math
and science scores, for example, of our children is something that we
have to be worried about when you do international comparisons. So what
the President will outline is a specific proposal of this American
competitive initiative that is essentially to double basic research in
the physical sciences over the next 10 years. We will have specific --
he will call for the permanent placement of the R&D tax credit as,
again, so it will both be a federal commitment and a private commitment
in basic research to continue to innovate and make sure that we are one
of the technological leaders in the world.

It is something that's critically important and, as I said also,
there was a specific concern about math and science scores. The
President will build on the success of No Child Left Behind and propose
70,000 high school teachers to lead -- to train 70,000 high school
teachers to lead advance placement courses in math and science. We'll
bring 30,000 math and science professionals to teach in classrooms and
give early help to students who struggle in math so they have a better
chance at good high-wage paying jobs.

So this is a three-pronged approach, doubling the federal
commitment to the most critical basic research programs in the physical
sciences over the next 10 years. It is making permanent the R&D tax
credit that demonstrates both a federal commitment and a private
commitment to basic research, as well as having a very robust initiative
that tackles one of the long-term concerns that are in a knowledge-based
economy in which more and more of the physical barriers of competition
have been lowered through the Internet and other aspects of our
technology -- is that it's the skills of our people that are critical to
our economic competitiveness in the future, so the math and science
initiative will be a critical part of that.

But the question really is, are there certain national goals or
national priorities that can also lend impetus to these efforts. And in
this way, the President is going to be very clear and probably as blunt
as he has ever been about America's addiction to oil. And he will be
that clear when he says it, that America is addicted to oil, and that it
requires us to do something, obviously, about it. And what he is going
to talk about specifically is really what has been recent developments
in the type of research that will really be game changers in the near
future when it comes to the automobile, when it comes to how our
automobiles are powered. I mean, it really is -- I think there's --
somebody will correct me if I'm wrong, but 75 percent, I think, of all
the oil production goes directly to powering automobiles. It is the
elephant in the room when it comes to the energy issue.

Now, the President will talk about how we power our homes and our
businesses. He'll talk about the need for safe, clean, reliable nuclear
energy. He'll talk about solar power. He'll talk about other aspects
-- clean coal technology -- that we take seriously that part of the
energy issue. But on the automobile issue, he's going to be talking
specifically about cutting-edge research. Particularly when it comes to
what has been getting more and more attention in trade publications and
elsewhere is ethanol. And it's not ethanol the way we typically talk
about it during a Iowa primary of corn-based ethanol, it is -- talk
about is cellulosic ethanol, which as some of you who traveled with the
President down to Brazil, there are some interesting things going down
-- going on down there, in which a big part of their fuel mix comes from
sugar cane. There's actually some really interesting technology that
says we can convert wood chips, weeds, grass and other refuse into fuel.

To the extent with some specific -- a 22-percent increase, which
the President will propose tonight, in specific type of alternative
energy research, that we can really make a breakthrough in which we can
bring these types of technologies to the forefront.

So the question is, what does that mean in a goal-oriented way.
And the President will make very clear that we can bring this type of
technology, to make the kind of ethanol practical and competitive within
six years, which means, that coupled with some other new technologies,
that we can replace more than 75 percent of our oil imports from the
Middle East by 2025. So that really is a game changer when it comes to
our reliance upon foreign sources of oil, particularly if you'd save
from the Middle East, the equivalent of what would come from the Middle
East.

So the question is, why 2025; what takes so long, couldn't you
spend more money? The fact of the matter is, is that we have a fleet
that's already in use. We have 200 million cars already on America's
roads, and it does take time -- the technology gets available in the
next six years. In order then for the marketplace to take root and then
really become a massive-scale change -- people can't afford to buy a new
car, they -- as many, probably, here drive your car until it doesn't
drive anymore. There's about 200 million people who have that
challenge. Not everybody has the specific challenge of that, but the
bottom line is that it will take time to change it. But with this
aggressive goal, with some aggressive research, built upon $10 billion
in increases in federal research that we've done in the last five years,
we do believe we're on the cusp of something really different when it
comes to dealing once and for all for our dependence upon foreign
sources of oil.

So these two initiatives, these two aspects I think really will
serve as some of the keystone aspects of the President's domestic
agenda.

Now, you've heard a lot of talk about, and also will be something
very important to the President, and also, quite frankly, has issues of
competitiveness, is the issue of health care. And the President, as you
have already been reporting about, will discuss health care. He will
talk about the fundamental unfairness in our system right now in health
care, where big businesses are treated one way, but individuals and
small businesses are treated another way when it comes to tax policy, as
well as other types of advantages they get through regulations.

And what this will do is take the -- and particularly the vehicle
that has become so promising out of the wake of the Medicare legislation
is health savings accounts. We now have it to where about 3 million
Americans have health savings accounts. But what we've learned from
many people who have them is that they're still not getting the same
type of advantages or tax breaks that the big companies are getting. We
believe that there could be an explosion within the small business
community of offering these types of health savings accounts if we
leveled the playing field between small businesses and big businesses.

Other aspects of maintaining -- or in controlling costs of health
care has to rely upon the -- continue revolutionizing the information
technology of the industry. It's quite amazing to say that in an area
where there is such incredible technology used in the actual application
of care -- we all have seen it, the CAT scans and these things -- but
the actual industry, itself, lags way behind many other industries when
it comes to -- as we all know, when your doctor scribbles out his
prescription and nobody can read it -- well, that has inefficiencies
throughout the system when one set of doctors can't talk to another set
of doctors, everybody carries around their medical records. There are
estimates that say you can cut costs in medical care costs up to 25
percent through information technology. The President is going to talk
about that.

And then, lastly, the pervasive intrusion of junk and frivolous
lawsuits are something that continues to clog our courts and make it
difficult for doctors to do their job. The President will particularly
highlight the acute issue of OB/GYNs and the lack of access to OB/GYNs
in more than 1,500 counties throughout America. This is an important
issue, and it's something that the President will reiterate his support
for in this speech.

Some other things -- I'm going to preempt the questions. What
about Social Security, Dan? Is the President going to talk about Social
Security? Yes, he will. He will acknowledge the fact that the Congress
did not get it done. But this is one of the areas where the President
is going to, again, demonstrate that this is a problem that should bring
Republicans and Democrats together. And what he's going to do is
broaden the debate. This is not just about Social Security. It is
about a generational commitment our country has made that we have to
live up to.

The baby boomer generation, his generation, are soon going to
retire, and it's going to have an enormous impact on three programs:
Social Security, Medicare and Medicaid. And analysts from both the left
and the right will tell you that there is a problem. And this is
something that the President obviously has contributed to the debate
last year. We did not get the resolution we wanted in the Social
Security debate, but what we did do is put on the forefront the issue of
the problem that Social Security faces.

What the President is going to ask here is for the creation of a
commission that will take on all three of these issues -- the baby
boomer generational issues on all -- and the impact they have on all
three programs.

So you ask the question, well, what's different about this, Dan,
than the other commission you did? Well, the one we did earlier was an
executive branch commission. He will specifically ask for a joint
commission that could even contemplate having members of Congress on the
commission, both Republican and Democrat. So this is the President's
acknowledgment that this needs to be above partisan politics; we need to
bring both Republicans and Democrats, sitting members of Congress, to
the table. He will work -- he will not announce the formation of the
commission, but he will pledge and call on Congress to work with him to
come up with a bipartisan executive congressional commission that can
take on these three big issues as they relate to the baby boomer
generation. So that is something specific that he will talk about here.

There are other important issues in here that we'll talk about. I
want to get to your questions. Macroeconomic policy: The President
will obviously talk about tax policy, spending policy. He'll talk about
that he's glad that the Congress is taking on the issue of earmark
reform. He will ask the Congress for the authority for line-item veto.
These are important ways in which they can demonstrate, and we can
demonstrate collectively, that in Washington, D.C. we take seriously our
jobs of being good stewards of the taxpayer dollars.

He will talk about immigration, another critically important issue
both to our economy and to the character of our country. He will talk
comprehensively about it, both border security and a humane guest worker
program that brings rationality to our system that is totally irrational
right now.

So as I said -- maybe I didn't say. I said three sections to the
speech, but I think I rattled off foreign policy, the domestic section
of this speech -- and that is really where we'll be talking about the
competitive initiative, energy, health care and those things -- tax
policy.

And the last one has been -- the President has always been very
mindful that the true nature of our country is not gauged by our wealth,
but by the character of our nation. And he will talk about what he will
call a quiet transformation that is taking place throughout our country.
The fact of the matter is, violent crime is down enormously; welfare
cases are down; abortions are down; out-of-wedlock births are down.
This is a quiet transformation, and government has played a role over
the years. He is not going to take specific credit -- in fact, he's
going to go out of his way to say both Republicans and Democrats can
take credit for this transformation that is taking place, because there
has been a role -- through abstinence programs, welfare reform and other
aspects of social policy -- that has helped. But in a large part,
though, this has been a personal transformation of people becoming more
accountable. And it's something that is important, but there are areas
in which we can build upon that.

The President will talk about a -- we can now see, for example, on
the issue of domestic AIDS here in America, that we can see a day where
there are no new infections of AIDS if we put forward the right
resources and strategies. The President is going to talk about that.

So as we have in every State of the Union speech, and what will
always be a cornerstone of this President's presidency is the compassion
agenda and what we're doing. And that will obviously -- will also be
what we're doing to help the citizens of the Gulf Coast, and what our
strategy is to continue to make sure that we make the type of federal
commitment and have the right partnership with our local partners to
make sure that the people in the Gulf Coast recover.

With that -- yes.

Q Dan, 70,000 teachers -- are they new teachers, or existing?

MR. BARTLETT: New.

Q Okay. That will be funded out of the Department of Education?

MR. BARTLETT: Yes, sir.

Q And, also, just to double-check, the program on ethanol you're
saying would reduce Middle East oil --

MR. BARTLETT: Yes. Sorry for the omission. I did mention the
fact the President will discuss very clearly that there are some -- the
international community has made very clear to the Iranian government
that any ambition for a nuclear weapon cannot be tolerated. And he'll
continue to talk about how we will rally the free world to make clear
those -- of that bright line.

He will also -- and I think it's very important, and what you'll
see in this speech, is that this government and other governments,
whether it be European governments, have made very clear that our beef
is with the government, not with the people of Iran. And the President
will speak directly to the people of Iran to make that very point, that
he understands their aspirations, he understands what they want, and
that he hopes for a day in which our government can be -- have closest
relations with the people of Iran; that our concerns, our deep
reservations and our critical concerns from the point of national
security has to do with those who control the government. So there will
be a specific discussion about that.

Q Time goal for excerpts?

MR. BARTLETT: At 5:00 p.m.

Q Text?

MR. BARTLETT: An hour before -- 8:00 p.m.

Q On the teachers -- 70,000 advanced placement teachers?

MR. BARTLETT: Yes.

Q Is it AP you're talking about?

MR. BARTLETT: Seventy thousand teachers who are -- hold on, just
to make sure I get it right -- to train 70,000 high school teachers to
lead advanced placement courses in math and science. And there will be
-- and then we're also going to try to recruit 30,000 math and science
professionals, people who are engineers and scientists, to work in the
classroom. These have been some of the recommendations that have been
out there -- Lamar Alexander, Pete Domenici, some others have been
talking about.

Q -- through the Department of --

MR. BARTLETT: We'll work through the Department of Education
scholarship -- and programs that will help recruit scientists and
engineers to come work in classrooms.

Q All government pay, or will that --

MR. BARTLETT: Well, we'll put out a fact sheet tonight that will
have all this information on it. So I don't want to butcher it from
here.

Q How much would it cost?

MR. BARTLETT: The total initiative is a $50-billion commitment
over 10 years for all elements of this plan.*

Q Do you have a total cost estimate for all the initiatives that
the President will lay out, either with or without the tax --

MR. BARTLETT: I don't have it on the top of my head. We can get
that to you by tonight.

Q Any recognition of Katrina in the speech?

MR. BARTLETT: Yes, a lengthy recognition of the duty we have to
help the people of the Gulf Coast, quite frankly, not only to recover,
but to address some of the underlying problems that were there before
the storm even hit, to make sure that we build back better schools,
provide better economic opportunity to the region. This will be
something that will be very specific and very -- and a direct commitment
by the President yet again.

Q But when you say the "issues prior to," what are you
specifically discussing?

MR. BARTLETT: Again, that we shouldn't have been satisfied with
the state of education, for example. If you look at New Orleans, if you
look at some of the highest poverty and unemployment rates persistent in
parts of Louisiana, for example, and Mississippi, and it's critically
important that we have strategies and we rebuild, we rebuild better, and
make it more hopeful and have better opportunities.

A lot of those we'll be working hand-in-hand with local
governments. They are the ones who are creating the vision. In many
respects, we'll be helping fund that vision. But it's critically
important that we just not build it back the way it was. We've got to
build it back to make it better.

Q What about Katrina? Is he going to say anything about another
supplemental? Does he support another supplemental? And is he going to
announce any new initiatives? Or is he just going to talk about money
that's already been appropriated?

MR. BARTLETT: Well, we do have a budget coming out, and the
federal commitment to the Gulf Coast is already to the tune of $85
billion. We are working on supplementals, as well as the budget
process, itself. It will be very clear, not only tonight, but in the
days and weeks to come, the federal government's commitment to helping
the people of the Gulf Coast.

Q How much is that supplemental, how much is that?

MR. BARTLETT: I can't tell you that today.

Q Dan, is he going to make any specific reference to the
lobbying -- Abramoff?

MR. BARTLETT: Well, he'll definitely make clear that we all have a
duty in Washington, D.C. to live up to the oaths of office, that we all
-- and he will definitely endorse the reform movement that is happening
in Congress. He's not going to lay out a specific plan, but pledge to
work with the Congress to enact reforms when it comes to lobbying, yes.

Q Dan, what happened to hydrogen cars? And also, how far along
is the President in his thinking about civilian reprocessing?

MR. BARTLETT: I'm glad you raised both those issues, because I
would be remiss if I didn't mention the fact that he will talk about
hydrogen cars. We actually have seen promising -- the President laid
out his vision on this. This is a much longer-term vision. The
cellulosic ethanol that I talked about is something that is more on the
cusp. But we're going to accelerate some of our funding into hydrogen
research, so it is still a critical aspect of our long-term future of
energy independence. And he will talk about that specifically.

The reprocessing issue you talked about is one that has been
discussed in some newspapers and elsewhere about discussions our
administration is having about creating an international framework in
which we can deal with the rapid expansion of nuclear energy, whether it
be in Asia or other parts of the world, and, hopefully, here at home.
And the question really is, is the reprocessing issue -- how can we set
up an international regime in which we can be confident; and how that
technology -- who has access to that technology; and then what you do
with the spent fuel.

The President will not discuss this specific initiative in the
State of the Union tonight, but it is something that is being actively
worked. And it's interesting, if you want to know -- some of you who
follow the issue with Iran more closely -- a microcosm of this issue on
a more global scale is the issue with Iran. The President, as you know,
has endorsed a proposal put forward by the Russians to have the fuel
cycle take place outside of Iran; that they supply them so they can have
a civilian nuclear energy program, take the spent fuel out to make sure
that there is no proliferation issues. And in a nutshell, that is
really kind of a -- if people are trying to get an understanding of what
-- the broader global initiative we're talking about, that really is
what it is on a much more specific instance.

But the question is, host countries, countries who have ambitions
to have nuclear energy -- India, for example, others -- and the question
is what type of international regime can we set up to accommodate that
and it's something we're actively working on.

Q -- there's money in the budget, a small amount of money?

MR. BARTLETT: There is money in the budget, and we'll be talking
about that in the coming days and weeks.

Q How much?

MR. BARTLETT: I don't have a specific number for you tonight.

Q Dan, we've been told there's no planned mention of Coretta
Scott King. Is that still the plan? And if it is the plan, why is --
does that administration consider that inappropriate in the State of the
Union address?

MR. BARTLETT: You need better sources, Ken. (Laughter.)

Q Can you elaborate, though?

MR. BARTLETT: You'll be there to cover it.

Q Well, this is embargoed and just for planning purposes, will
there be a mention?

MR. BARTLETT: Yes.

Q Is that a change in plans, or did someone just tell me wrong?

MR. BARTLETT: Like I said, I don't --

Q Let's see if he's here. (Laughter.)

Q Are you saying that he will mention Coretta Scott King? Are
you saying that he will mention Coretta Scott King?

MR. BARTLETT: Yes.

Q -- addiction to cars. You've outlined some technological --

MR. BARTLETT: Addiction to oil.

Q To oil.

MR. BARTLETT: Not addiction to cars.

Q Will there be any discussion of driving less?

MR. BARTLETT: Well, we've talked about conservation efforts. And,
in fact, key aspects of the energy bill that was passed this past year
have many incentives for conservation, and also have incentives, tax
incentives, for the purchase of hybrid vehicles, for example. There has
been probably the biggest incentive for people to drive less, and that
is the fact that oil is as expensive as it is today. And it's had a
direct impact on the driving habits of the American people.

But the fact of the matter is, the way we're going to solve this
issue over the long run, is going to be through the harnessing of
technology and the rapid development and deployment of technology. Many
people don't -- I didn't realize until looking at this issue that
automakers are already creating -- have already created 4.6 million cars
on the roads today that can accommodate flex fuels, for example, this
ethanol-based gas fuel system. In order for them to ramp that -- and GM
is doing over a half-million cars this year, and Ford has committed to
overturn 50,000 flex fuel cars. This is what's going to revolutionize
the debate on energy and automobile use. And the President's agenda and
the President's specific proposal will help accelerate that
dramatically.

Q Dan, the 75 percent goal on Middle East oil, can you get that
strictly from this flex fuel stuff you're talking about?

MR. BARTLETT: Like I said, it's a combination of the ethanol
research we're doing, as well as other aspects of technology. He will
get into a little bit of it --

Q Does it include ANWR?

MR. BARTLETT: No, not in that analysis, no.

Q What about CAFE standards?

MR. BARTLETT: Well, we have always supported and will continue to
advance CAFE reform, but that is not a part of our equation on this
conclusion.

Q What are the other things that you're talking about?

MR. BARTLETT: Well, we'll have specifics that we'll roll out later
on that.

Q Can you also translate -- 75 percent Mid-East oil -- what
percentage of our imported oil is that?

MR. BARTLETT: Say that again?

Q You say it could reduce our dependence on Middle East oil by
75 percent. Can you provide -- what does that mean in terms of reducing
our dependence on foreign oil? Because we don't get that as much from
the Middle East anymore.

MR. BARTLETT: Well, I think one of the biggest concerns the
American people have is oil coming from the Middle East -- is a very
volatile region in the world. There are other volatile regions --

Q The whole pie -- how much of it --

MR. BARTLETT: I'll have to get you the -- I don't have that on the
top of my -- but there was another aspect of your question?

Q Yes, it was, what else does it --

MR. BARTLETT: Well, one part that I forgot on the automobile
aspect of it, the other promising research that I haven't -- the
technology I haven't talked about is new batteries that will make
hybrids and plug-ins a reality. The problem has been in the past that
the batteries have been too big and they haven't held power long enough.
But the type of research that has gone into our cell phones and other
things, lithium batteries are really on a fast pace to becoming
revolutionized in which they can afford a car to go up to 60 or 90 miles
clearly on just electrical power. They're plug-in -- been a lot of
recent coverage of this. We will advance funding in the area of lithium
battery research, as well. So that's another one of the technologies
that helps us come to the conclusion of 75 -- the 75 percent figure.

MR. BARTLETT: Well, the best reform we can do is make the tax cuts
permanent, as the President will argue tonight. We don't want a
temporary expansion, so we shouldn't have a temporary tax cut, we should
make it permanent. We will continue to discuss the issue of broader tax
reform with the Congress, but that is not something that will be
detailed in this speech.

Q On health savings accounts, it's been argued that if you
really want to help those that can least afford health insurance that
you should probably instead propose some form of tax credit that's
inversely proportionate to income. And I just wondered why the White
House doesn't approach this problem in that way.

MR. BARTLETT: We do have -- my understanding is we do have -- have
proposed in four budgets in a row a tax credit for low-income Americans
that addresses that very specific issue. It's been something that the
Congress has had different ideas about. We continue to think that is an
important policy. The President will also make clear that the federal
government has a commitment to the poor and to the elderly when it comes
to health care, and we're going to live up to that commitment. But we
have other ways that we can tackle the rising costs of health care,
strengthen the doctor-patient relationship, and he'll talk at length
about those things.

Q What about tax deductibility for health care expenses? Is
that an idea that's kind of off the table now?

MR. BARTLETT: No, that's exactly -- that's what I'm talking about,
as far as, if you own a health savings account, we're going to allow you
to completely writr off tax cuts -- I think what's been speculated in
the press is that if you're in a health savings account, you will get
that tax deductibility. So it is a part of the program if you're a part
of a health savings account.

Q Have you got a cost projection on that, Dan?

MR. BARTLETT: We do have one; I don't have one. We'll have, like
I said, fact sheets. We'll have -- all those things will come out in
regular order and will come out in advance of the speech, so everybody
will be able to do all that.

Q Is the President going to announce any breakthrough in illegal
immigration, which is on the rise? And there are -- millions are not
captured, and they are under the table -- they are living under the
table. So to make them come out and pay taxes and the economy --

MR. BARTLETT: He will definitely talk about the issue of
immigration and why we need comprehensive reform. And he will also
acknowledge the fact that there are some that claim that immigrants are
somehow bad for our economy, even though the economy couldn't function
without them. He will almost say it explicitly like that. And so he
acknowledges the reality of where we face on the immigration issue.
He'll make very clear that we have a responsibility to enforce our
borders, but he's also going to, again, make the case that in order to
take pressure off the borders and have a rational system for not only
employers, but also for the people who are coming here, is to have a
humane guest worker program.

Q Any breakthroughs tonight?

MR. BARTLETT: Well, he's going to call on Congress to do it.
There was action both in the House and the Senate, and we do believe
this is the year that we should act.

Q Will he talk about plans for a troop drawdown in Iraq, go any
further --

MR. BARTLETT: He'll talk about why he's optimistic this year that
there can be troop drawdowns. There already has been some announced on
Christmas Eve by Secretary Rumsfeld and General Casey. But he will also
make very clear that the conditions for it will be just that, conditions
on the ground and commanders on the ground, based on their assessments
of developments in Iraq. So he will say that -- he will argue, as most
Americans do, that they want -- he wants the troops to come home, but he
wants them to come home with victory.

Q Can you tell me the importance of this year's speech before
midterm elections?

MR. BARTLETT: Well, I think it is a midterm election, obviously,
and it's -- like I commented earlier, that there is a -- already a kind
of atmosphere of high partisanship with the nomination process and these
things, which the President will recognize -- we hope, to be the two new
justices who will be in attendance, Justice Alito and Chief Justice
Roberts.

But I think what the President will argue in this speech is that
the issues before our country are bigger than politics, and both
Republicans and Democrats should be able to come together. Those of you
who have talked to Ken Mehlman and others, we've already said good
policy makes good politics, and we stand by that. And a bold,
aggressive, optimistic agenda will be one that both Republicans and
Democrats can come together on. And it's also one in which the
President, as the head of his party, will be able to articulate next
fall in a way that can help maintain our control of the Congress.

Q Can you preview the guests?

Q On the oil program, to what extent were energy companies and
lobbyists involved in the planning of the oil use reduction?

MR. BARTLETT: The oil -- who, the lobbyists?

Q I'm just wondering about energy companies. There have been
questions in the past about discussions with energy lobbyists. I was
wondering, as you all prepared this policy that you're going to announce
tonight, to what extent --

MR. BARTLETT: Well, for example, to get information about what
automakers are doing, we've obviously talked to automakers about flex
fuels and those things we're doing. A lot of the development of this
policy, my understanding, and I don't have all aspects of it, is that
the thrust of this plan is government-backed research that is taking
place as we speak. So a lot of the discussions were with scientists and
others at the Department of Energy, at Department of Commerce. The main
areas of plus-ups in some of these programs were with the National
Science Foundation; NIST, which is over at Commerce, as well as the
innovation division at the Department of Energy. So most of -- my
understanding of the development of this policy has been done through
the scientific experts internally.

Now, there have been -- for example, this Fortune Magazine story,
the most recent cover of Fortune talking about how to beat the high cost
of gasoline: Stop dreaming about hydrogen. We're not dreaming. We're
funding it. But ethanol is the answer to the energy dilemma. And
there's -- it talks a lot about venture capital and where the money is
being invested in the private sector. And I know that we've talked to a
lot of people who are doing investing in this area, as well. But I
don't know specifically on that part of your question.

Q Do you expect any legislation to come out of --

MR. BARTLETT: One more after this, and that's it.

Q Do you expect any legislation to come out of that entitlement
commission you're talking about? And what is the rationale, given these
are three very complicated issues and we know the Tax Reform
Commission's recommendations have been delayed and other blue ribbon
panel recommendations in --

MR. BARTLETT: I think it's the very enormity of the problem that
requires a legitimately and substantively vigorous research into it, and
also requires to have the stakeholders -- i.e., Congress -- invested in
it. And that is how this commission will be different than those is
that we will even contemplate sitting members of Congress in both
parties serving on it.

Q Can I follow up on that?

MR. BARTLETT: Last question. I just saw your hand --

Q Yes. I was just wondering, can you give any estimation on how
much money this research on energy will cost?

MR. BARTLETT: The research -- well, the --

Q -- the information before with the --

MR. BARTLETT: We'll have, like I said, in the vital areas of
energy research that we're increasing, it's a 23-percent increase. But
I'll get you the baselines on those later today.

Q -- 22 or 23?

MR. BARTLETT: Did I say 22 earlier?

Q Yes.

MR. BARTLETT: I've got to get my act together.

Q Is it already that much more expensive? (Laughter.)

MR. BARTLETT: I've got to get off the podium. Josh is going to be
mad. Twenty-two. I'm sorry, 22 percent increase.

Thank you, everyone.

END 3:17 P.M. EST

* The American Competitiveness Initiative is a $50-billion commitment
over 10 years for the doubling of our federal R&D in the physical
sciences, and with making the R&D tax credit permanent and other
components represents $136 billion over the next ten years for all
elements of this plan.